Next time you’re at a party and you’re in the mood to really bore someone, share this market tidbit with them: “Since February 1988, the S&P 500’s average daily return has been 0.037%, and it has closed higher on 53.66% of the time.”

Although you’re probably likely to find yourself alone in a corner if that’s the extent of your cocktail party chitchat, such information can be more useful than you might think in understanding the stock market’s behavior and enhancing your trading skills. The past few days are a good case in point.

By Monday, the S&P 500 (SPX) had rallied some 9% off its February 9 low, hitting a three-week high. On Tuesday, though, the index closed down 1.27% (after pushing to a higher intraday high), likely worrying nervous bulls about an interruption of the market’s current rebound.

Source: OptionsHouse

Here’s where more “boring” market stats come into play. Many short-term traders are familiar with the concept of momentum trading—essentially, buying hot markets with the expectation they will extend their moves in the near future. Given the choice, such traders would likely prefer to go long on the close of a day the market gained 1% or more vs. a day it lost 1% or more.

Get ready to be a more interesting party guest. The columns in the following chart represent the SPX’s average return the day after 1–2% up days vs. 1-2% down days over the past 30 years (the average return for all days is included for comparison):

Source: OptionsHouse (data)

That’s right, the average one-day return after a 1–2% up day was 0.044%—just a little more than the average return for all days—while the average return after 1–2% down days was 0.114%, nearly three times as much. The numbers near the top of each column, which represent the percentage of higher closes for each group, tell the same story: The SPX closed higher after 1–2% up days less often (50.61% of the time) than it did after 1–2% down days (56.22%). So, although it would hardly be a recommended trading strategy, if you had no other factors to consider, you’d be better off buying the SPX (via the E-Mini S&P 500 futures or some other proxy) on the close of a 1–2% down day rather than a 1–2% up day. Over time, the odds suggest you’d come out further ahead.

Dry stats, perhaps, when you consider them in isolation, but they can sometimes add up to bigger things when you start putting them together.

A calendar reminder: Today is the first trading day of March, which has had a fairly decent track record for bullishness since 1960, closing higher nearly 59% of the time, and closing above the open 60% of the time. Over the past 20 years it’s closed up 13 times (65%), and closed above the open 14 times (70%).

Click here to log on to your account or learn more about E*TRADE's trading platforms, or follow the Company on Twitter, @ETRADE, for useful trading and investing insights.

PLEASE READ THE IMPORTANT DISCLOSURES BELOW.

Important Note: Options transactions are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. For more information, read the Characteristics and Risks of Standardized Options brochure before you begin trading. Also, there are specific risks associated with covered call writing including the risk that the underlying stock could be sold at the exercise price when the current market value is greater than the exercise price the call writer will receive. A covered call writer foregoes participation in any increase in the stock price above the call exercise price and continues to bear the downside risk of stock ownership if the stock price decreases more than the premium received. Moreover, there are specific risks associated with trading spreads including substantial commissions, because it involves at least twice the number of contracts as a long or short position and because spreads are almost invariably closed out prior to expiration. Multiple-leg options including collar strategies involve multiple commission charges. Because of the importance of tax considerations to all options transactions, the investor considering options should consult his/her tax adviser as to how taxes affect the outcome of each options strategy. An Options investor may lose the entire amount of their investment in a relatively short time.

This was calculated based on E*TRADE's Active Trader fees and commissions, and may have different results if executed with a broker charging different rates.

Educational materials provided by E*TRADE are for informational purposes only. This information neither is, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities by E*TRADE Securities or its affiliates. No information presented constitutes a recommendation by E*TRADE Financial or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy. The views expressed may be subject to change at any time. You are fully responsible for any investment decisions you make and such decisions will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance and liquidity needs.

The S&P 500 Index is a market capitalization-weighted index of 500 widely held stocks often used as a proxy for the US stock market. It is not possible to invest in an index.

It is not possible to directly invest in an index.

Investing in securities involves risk, including possible loss of principal.

Past performance is not an indication of future results.

Supporting documentation for any claims will be provided upon request.

Commodities are assets that have tangible properties, such as oil, metals and agricultural products. Investments in commodities and commodity-linked securities may be affected by overall market movements, changes in interest rates and other factors, such as weather, disease, embargoes, and international economic and political developments, as well as the trading activity of speculators and arbitrageurs in the underlying commodities. Investments in commodities or commodity-linked securities may not be suitable for all investors.

The use of derivatives (futures, options and swap agreements) may create additional risks that would not be present in the underlying securities themselves, thus raising the potential for greater investment loss. Examples include a reduction in returns, increased volatility, exposure to the effects of leverage, and the risk that the other party in the transaction will not fulfill its contractual obligations.

E*TRADE credits and offers may be subject to U.S. withholding taxes and reporting at retail value. Taxes related to these offers are the customer's responsibility.